The owner of a cryptocurrency exchange has been recently convicted in a transnational scheme of defrauding people through an online auction fraud. Court says the scam reached a multi-million dollar scale.
As per a recent report, people who suffered from the fraud were probably more than 900 American citizens. According to the official statement, 53-years-old Rossen Iossifov, formerly of Bulgaria and reported owner of a Bulgaria-based Bitcoin exchange R.G. Coins, was convicted of both conspiracy to commit racketeering and money laundering. After a two-week trial, the jury in Frankfort, Kentucky and U.S. District Judge Robert E. Wier scheduled the sentencing to Jan 12, 2021.
Reportedly, some of the Romania-based members of the group posted a false advertisement to promote an online auction and sales websites, among which Craigslist and eBay. The ad promised its victims high-cost goods (typically vehicles) that did not exist.
As per the release, members of the scam would use stolen identities to promote and convince their victims to send money for the advertised items via “persuasive narratives”. For example, some of the ads had impersonated a military member in need of selling the advertised item before deployment.
The scammers also provided invoices with trademarks of reputable companies to their victims, making the transactions seem legit. The legal document also reveals that members of the conspiracy set up call centers, offering customer support. This way they would provide advice to client questions and “alleviate concerns over the advertisements”.
According to the official statement, once Iosiffov received the victims’ funds, he and his fellows would convert them into crypto assets and transfer them to off-shore money launderers.
As per the court documents, “since at least September 2015 to December 2018, the Bulgarian exchanged crypto assets into local fiat currency on behalf of his Romania-based partners in the scam, knowing that Bitcoin presented the proceeds of illegal activity.”
According to the court statement, in just two and a half years, Iossifov exchanged more than $4.9 million worth of Bitcoin for only four of the members of the criminal team.
A total of seventeen defendants have been convicted in the case. Three others are fugitives. Police departments in the U.S. and Romania have led the procedures on the case.
It’s worth noting that the US DOJ is becoming increasingly active in pursuing crypto-related fraud. As CryptoPotato reported earlier, it went after 280 cryptocurrency accounts related to hackers from North Korea.